"..The commencement of these proceedings without honouring the adjudication award and the judgment, in flagrant disregard of the "pay now, argue later" regime of the HGCRA, amounts to unreasonable and oppressive behaviour.” However, the court accepted Kew’s submission that a strike out would be too draconian a sanction and that a stay of proceedings, unless and until the outstanding sum was paid, was the appropriate remedy and it so ordered. Kew was also ordered to £600,000 into court as security for DIA’s costs in the proceedings pursuant to CPR 25.12.
DIA made an application to strike out the proceedings unless Kew made payment within 7 days, or in the alternative for an order that the proceedings be stayed until payment was made. They also applied for security for costs. Kew did not oppose the application for a stay, but they opposed the strike out and security for costs applications. S&T v Grove Developments[15] and M Davenport v Greer[16] on the basis of which it was clear that Kew would not have been entitled to start a further adjudication in respect of its claim for damages for negligence, without paying the award, nor could it rely on any subsequent ‘true value’ adjudication as a defence to the enforcement of the award. But here was a different situation, as the award had already been enforced by way of summary judgment. The court referred to There was nothing in the Act or the authorities that would render the current proceedings unlawful or an abuse of process. The Act expressly contemplated the commencement of legal proceedings to establish the parties’ rights and obligations by way of a final binding determination. That right was ‘more fundamental’ than the obligation to meet the award. There was nothing to suggest that the complaints over the services were disingenuous.
Comment
This decision is in line with S&T v Grove and M Davenport v Greer but it highlights a distinction between (a) the right to commence court (or arbitration) proceedings for a final determination of an issue determined by an adjudicator before satisfying the award; and (b) the right to bring a new adjudication by way of cross claim or for a true value. But the outcome is the same; until the award is paid the right to proceed to final determination, or, by the same token a cross claim, is almost certain to be prevented by a stay if not a strike out.
The ‘pay now argue later’ philosophy is preserved.
The court was satisfied that:
“….the claimant is in deliberate and persistent breach of the Order dated 5 February 2019. The Claimant's repeated promises to pay the outstanding sum indicate that it could satisfy the judgment but has chosen not to do so. ..
[15] [2018] EWCA Civ 2448 [16] [2019] EWHC 318 (TCC)
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